Experts: Debate will lay foundation on energy taxes

A panel of experts expressed pessimism Wednesday that lawmakers can tackle broad-based tax reform this Congress, but they stressed that the coming months will be crucial in shaping the eventual outcome on energy tax policy.

“I wouldn’t bet my mortgage that it’s going to happen in this Congress,” Malcolm Woolf, senior vice president for policy and government affairs at Advanced Energy Economy, said during POLITICO Pro’s Deep Dive on taxes and energy.

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But the experts stressed that the groundwork for a future package will most likely be laid in the next 18 months.

“Even if it doesn’t end up in a comprehensive bill this year, pieces that are talked about now will eventually make it into legislation,” said Dorothy Coleman, vice president for tax and domestic economic policy at the National Association of Manufacturers.

And Richard Caperton, managing director for energy at the Center for American Progress, said lawmakers can achieve several milestones during this Congress, even if a comprehensive tax reform package is out of reach. They include extending the production tax credit for wind energy and eliminating tax breaks for the largest oil companies.

The experts’ comments appear to toss some cold water on Senate Finance Committee Chairman Max Baucus’s efforts to reach a tax reform deal before he retires in 2014.

“I think he’s more motivated, I really do. I think he’s going to double down on wanting to do this,” Stabenow said during the POLITICO Pro Deep Dive.

In the meantime, the energy experts said they eagerly await the release Thursday of a Finance Committee white paper on energy and taxes as a sign of things to come.

Caperton said he’ll be on the lookout for a “commitment to fighting climate change.” And Coleman said manufacturers won’t be pleased if the white paper includes discussion of eliminating tax breaks for oil companies or imposing a carbon tax.

The experts said they already are preparing for another fight over extending expiring tax breaks at the end of this year.

Steve Ellis, vice president of Taxpayers for Common Sense, said tax extenders are “the cockroach of tax policy in that they always survive.”